JPMorgan Chase & Co. is reportedly testing the use of its private blockchain for collateral settlements. According to Bloomberg, the JPMorgan private blockchain executed a trial transaction on May 20. As a result, two of its businesses transferred a tokenized version of Black Rock Inc. money market fund shares.
The multinational bank has had an active interest in crypto and blockchain technology for quite some time. And it also created Onyx Digital Assets (ODA) in late 2020. The project’s definition is a “blockchain-based network that enables the processing, recording, and Delivery-versus-Payment (DVP) exchange of digital assets across asset classes.”
JPMorgan private blockchain to work after-hours
According to the bank, JPMorgan’s more enormous ambition for its private blockchain is to allow investors to present a wide range of assets as collateral, which may be used outside of usual market hours. It specifically mentioned equities and fixed income.
“What we’ve achieved is the friction-less transfer of collateral assets on an instantaneous basis,” JPMorgan’s global head of trading services, Ben Challice said. BlackRock was not a counterparty, but it has had heavy involvement in the initiative “since day one and are exploring use of this technology.”
Getting ahead of the trend
Tyrone Lobban, head of JPMorgan’s Blockchain Launch and the ODA, said the bank is striving to anticipate a trend. In which a wider range of traditional financial services will be in supply via blockchain technology.
While it is unclear whether JPMorgan used the ODA in this case. The network’s design is to swap cash for various types of tokenized collateral. It also provides intraday liquidity and provides access to the bank’s digital payment infrastructure and token JPM Coin.
This week, BNP Paribas, a European bank, executed its first tokenized fixed income market exchange through the ODA.